Bank of Japan Governor Haruhiko Kuroda said a mix of fiscal and monetary stimulus would give a bigger boost to the economy than taking fiscal and monetary steps individually, signalling that the government could play a bigger role in helping spur growth.
But he said the BOJ would not time any easing steps with the government's decision to ramp up spending, stressing that keeping current ultra-low interest rates alone would enhance the effect of fiscal policy.
"If the government saw the need to use fiscal policy (to support growth), a mix of fiscal and monetary policies would have a bigger impact than deploying fiscal and monetary steps separately," he told.
"That's not to say we have any particular plan to take monetary steps in tandem with bigger government spending."
Kuroda has repeatedly said if the BOJ were to ease, it would seek to push down short- to medium-term borrowing costs without causing an excessive decline in super-long yields. One way to keep long-term yields from falling too much could be for the government to issue more super-long bonds, he said.